As reported in a recent Legal Beat, the U.S. House, last week, overwhelmingly passed the Paycheck Protection Program (PPP) Flexibility Act, by a vote of 417-1. Yesterday, the Senate passed the House bill. This bill provides new flexibility to PPP borrowers in several key aspects. Borrowers can apply for a PPP loan through to December 31, 2020. However, Senator Ron Johnson convinced the Senate leadership to sign a "letter of intent" that the PPP program not be automatically reauthorized through the end of the year. "Put that letter in the Congressional Record so that we are certain that we're not reauthorizing this or authorizing it through Dec. 31, that the authorization does end June 30," Johnson said.
--Instead of an 8-week period to spend PPP funds, borrowers have a 24-week period after the PPP loan is approved or until the end of 2020 (whichever comes first) to spend PPP funds and qualify for loan forgiveness.
--The requirement to spend 75% of a PPP loan on payroll costs for maximum loan forgiveness has been reduced to 60%.
--For new PPP loans approved after the law is passed, the loan term is 5 years. (Existing PPP loans would still have a loan term of 2 years.)
--Borrowers can defer payroll taxes on PPP loan proceeds used for payroll. I will provide more details on the PPP Flexibility Act in a future Legal Beat.

The Paycheck Protection Program (PPP) specifically requires certain reductions in a borrower’s loan forgiveness based on reductions in full-time equivalent (FTE) employees during the 8-week loan forgiveness period (covered period). The SBA has adopted exemptions to the FTE reduction rules for borrowers who have rehired employees and restored salary and wage levels by June 30, 2020, or who have offered to rehire employees or restore employee hours, even if the employees have not accepted. Specifically, in calculating the loan forgiveness amount, a borrower may exclude any reduction in FTE employee headcount that is attributable to an individual employee if:

This is the fourth in a series of articles on Bankruptcy. Feel free to review Part 1, Part 2 and Part 3.
Sometimes it takes a catastrophic event to shake up the status quo. COVID-19 is such an event. For years, telecommuting or working from home has been increasing, and eventually the culture would have changed. After this forced experiment, many of us who do not need to be physically present in an office some or most of the time will probably not do so.
This puts great pressure on the commercial office space industry. Those businesses that can maintain their workforce, but use less office space, will be at a competitive advantage. Those businesses who retain fewer employees will need even less space.
This brings us to today’s topic. In our example, Professional Pension Consultants, Inc. (the “Company”) is a 40-year-old business that designs and administers pension and profit sharing plans for primarily professional, mid-size businesses. They have 20 employees, six of whom are actuaries, CPAs, attorneys or managers. They have a 5,000 square foot office and pay $200,000 a year in rent.

As a refresher, the Paycheck Protection Program (PPP) was authorized by the Coronavirus Aid, Relief and Economic Security Act (CARES Act), a $2 trillion bill signed into law in March. In April, the PPP and Health Care Enhancement Act (Health Care Act) provided about $310 billion to replenish the PPP. A hallmark of the PPP is that for the loan proceeds to be forgiven they must be spent on “eligible expenses” within the 8-week period following funding of the loan, with at least 75% of the loan proceeds being spent on payroll-related costs. The 8-week period has created much controversy, as many businesses have expressed fear they will not be able to utilize all or a substantial part of the loan, as they have not yet resumed business and, as such, have not yet brought back their employees.
Yesterday the House voted overwhelmingly in favor of a bipartisan bill that would extend the 8-week period in which small businesses can use their PPP loans, as well as allowing them to spend less than 75% of the loan proceeds on payroll.

This is Part 3 of a series on Bankruptcy. This article will discuss the necessity of making the Limited Partnership Agreement or the LLC Operating Agreement an executory contract. Feel free to review Part 1 and Part 2.
Many of our clients have set up LLCs and to a lesser extent, limited partnerships, in order to safeguard their non-exempt assets. Assets that are not exempt under Florida law such as stocks, bonds, money market funds and real estate other than the homestead are placed in these entities. For convenience, we will assume we are dealing with an LLC, although the rules are the same for limited partnerships. If the LLC is owned by more than one person and there are no fraudulent conveyance issues (e.g., LLC formed and/or funded after the debt was incurred, etc.), a creditor of an LLC member’s sole remedy is a charging order. This means that the creditor can only intercept distributions from the LLC that otherwise would go to the debtor-member.

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